Opportunities
Pet Boarding Outside of Philadelphia
Sold
Low price due to seller’s age & health!
Specifications
A 10% down payment of $29,500 returns $114,046 in the first year after debt payments! This facility has an extremely dedicated staff of 14 in place to take care the 4,000 active clients and 8,000 clients on the books. Located just outside of Philadelphia, this boarding and grooming facility with pet transportation has a general manager that can run operations. Owner’s responsibilities include general oversight. With the ability to house 114 pets since 1990, this overnight pet care business is fully equipped with over $215k in assets. With a 19% profit margin, the business has $150,000 in buildout completed with a 4,000 sq. ft building; 450 sq. ft office, 450 sq. ft apartment for senior staff (providing 24-hour animal coverage). They also offer a shuttle service to and from their location for overnight stays.
Departments include customer care, pet care, pet stylists and bathers, and pet chauffeurs. There is an on-site apartment housing a senior staff member to ensure the pets are cared for 24 hours a day. With no advertising in place, word of mouth and recommendations from local veterinarians keep people coming back. The building is perfect for furry friends- featuring ample outdoor space including small pools and room to run.
With pet transportation already in place, expanding this service to include homecare for sick animals would be an excellent growth opportunity as well as adding a daycare. Adding behavior and training courses would also be a great way to showcase the facility to owners while they learn new skills with their pet.
Business Highlights
- Year Established: 1990
- Location: Outside of Philadelphia
- Service Area: Philadelphia Metro & Southern New Jersey
- Capacity: Up to 114 animals; 80 indoor/outdoor accommodations, 12 cat condos, 12 indoor holding stalls, 10 outdoor overflow stalls.
- Services: Boarding and grooming with transportation
- Building: 4,000 sq. ft building; 450 sq. ft office, 450 sq. ft apartment for senior staff (providing 24-hour animal coverage) [Building can be purchased through Seller’s Counsel separately for $250,000 if desired]
- Reason for Selling: Retirement, aging, health of seller
- Employees: 14: 10 FT Employees, and 4PT Employees
- Seller Training Period: 6 months
- Growth Opportunities: Daycare – requested often by current clients, there is room to easily add
- Owner’s Responsibilities: General oversight
Financial Highlights
- List Price: $295,000
- Gross Sales:
- 2019: $834,439
- 2018: $769,886
- Cash Flow:
- 2019: $157,862
- Assets Included in Purchase*
- Equipment: $25,000 Office equipment; $20,000 Grooming/bathing tools and dryers
- Vehicle: $12,000 Van with vinyl-wrapped graphics
- Build-out: $150,000 custom built dog accommodations; $3,000 storage sheds (2)
- Inventory: $5,000 pet supplies
- Intangible Assets: Long standing reputation, social media presence, extensive client reviews.
*amounts may vary
Cash Flow Analysis
| Description of Financial Statement | Tax Return | Tax Return | Tax Return | Tax Return | Notes |
| 2019 | 2018 | 2017 | 2016 | ||
| GROSS SALES | $834,439 | $768,835 | $780,512 | $778,404 | |
| Net Income Shown on Financial Statement | $27,608 | $-774 | $-3,770 | $-10,109 | |
| ADDBACKS | |||||
| Compensation to Owner | $104,000 | $104,000 | $104,000 | $104,000 | |
| Tax on W2 Salaries | $8,497 | $8,497 | $8,497 | $11,440 | |
| Depreciation | $28,456 | $0 | $24,411 | $15,913 | |
| Interest | $1,713 | $1,233 | $360 | $232 | |
| Amortization | $0 | $0 | $0 | $0 | |
| Dental Insurance | $1,000 | $1,000 | $965 | $927 | Owner's personal dental insurance |
| Life Insurance | $3,277 | $3,277 | $3,277 | $3,277 | Owner's personal life insurance |
| Health Insurance | $0 | $0 | $0 | $0 | Owner's personal health insurance |
| Non-Business Telephone | $1,284 | $1,284 | $1,284 | $1,284 | $107/month for personal lines |
| Auto-Personal Use | $2,352 | $2,352 | $2,352 | $2,352 | $196/month for personal vehicle |
| Simple IRA | $3,120 | $3,120 | $3,120 | $3,120 | Company match for owner's IRA |
| Mortgage | $-23,724 | $-23,724 | $-23,724 | $-23,724 | Seller requires real estate to be sold on a 15 year term at 5% interest |
| Meals & Entertainment | $279 | $710 | $571 | $1,157 | Personal Expense |
| TOTAL ADDBACKS | $130,254 | $101,749 | $125,113 | $119,978 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $157,862 | $100,975 | $121,343 | $109,869 | |
| Profit Margin | 18.92 % | 13.13 % | 15.55 % | 14.11 % |
Profit Margin 2019: 19%
Services
- Dog and Cat Boarding (80%)
- Grooming and Bathing (20%)
- Retail and Transportation (5%)
Employees
- 10 FT Employees
- Senior Staff Member- Lives in on-site apartment and provides overnight animal care
- Customer Care Supervisor
- Senior Pet Care Technician
- Pet Care Supervisor
- Pet Stylist
- Pet Stylist and Bather
- Pet Chauffeur
- Pet Care Technicians (3-5)
- Groomer
- 2 PT Employees
- Assist with customer care, pet care, groomer and bathing as needed.
- Assist with customer care, pet care, groomer and bathing as needed.
- 22+ temporary employees available seasonally or when needed
Growth Opportunities
- Expand transportation services
- Offer in home care for sick animals or those that require unique attention
- Offer obedience and training classes
- Advertise
- Currently no campaigns in place, recommendations from veterinarians and happy customers bring repeat business
Valuation Details
The Firm Business Brokerage used a cash flow valuation methodology to determine the purchase price of the business.
The formula used is as follows:
Cash Flow x Prescribed Multiple = Fair Market Value
Cash flow is the sum of business net income plus any owner perks and any non-onward going expenses.
A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.
For this business, the 2019 cash flow was used with a prescribed multiple of 2. With this information, the computation is as follows:
$157,862 x 2 = $315,724
The fair market value found above positions the business list price at $295,000.
Funding Example
Purchase Price: $295,000
10%Buyer Down Payment: $29,500
10%Seller Financing: $29,500
80%Bank Loan: $236,000
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $550.
Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $3,101.
After business expenses and loan payments, a buyer with a 10% down payment of $29,500 would retain a profit of $114,046, which results in a 387% return on investment in the first year.
A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed purchase price of $295,000 with the terms listed above, the coverage ratio is 3.60.
Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857